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Saturday, January 30, 2010

Why is Building a Brand Important?

The main aim of any small business or a corporate company is to build a brand. Building a brand is of prime importance than making money in the business. Of course, everybody in the business is here to take profit from the business. But before taking a profit one should build the brand for their products. Without building a brand, taking out the profits will surely sustain for short term.

If you want to be in the business for long term, first build the brand and get the confidence and loyalty of the customers. Coco Cola and Pepsi, when they entered the Indian Market, for the first five years they spent lot of money in building the brand image. They never broke even for the first five years. Think of a Company which invested lot of money in one company and they never get paid for the investments for the first five years.

It may look ridiculous initially, but they have built a brand image in every household in India. From urban population to rural population in India, everybody knows these two brands. Initially, they started with their core business of beverages. But after having built the brand name, they have started introducing other food products also.

They have slowly entered the snacks market in India. First they penetrated the urban market and they slowly penetrated rural market also. Now the traditional snacks in india is being replaced by these snacks. Such was their brand image, which could even change the way of life in one country.

What Coke and Pepsi did in India is brand building. They did for the first five years and now they are reaping the benefit of brand building. You too, if you are interested in starting business, build the brand first, and then make profit out of it.